pointed out that there are substantially more growth in oil production in this country and that's both private and public land, obviously, but it's a useful document. another chart that i've passed out relates to weekly retail price for premium unleaded gasoline from '96 to october of 2011. it's not that chart but it's a different one that has been passed out, showing the price of gasoline in the united states at the retail is, tracks pretty closely the price for gas worldwide with the exception we don't have the tax action that the rest of the world has, and that's the big difference. and then the third is the chart

that we put up here on the board that shows u.s. oil production and gasoline prices, a percentage change year over year for the last two decades, and i think it's clear from this chart, at least it's clear to me that there is no relationship between the amount of oil we're producing in any particular year in the united states and the price of gasoline. the price of gasoline is determined by the price of oil in the world market and what we are producing in the u.s. has been relatively constant, has gone up somewhat in the last several years, but the price of gasoline has fluctuated dramatically during that period of time and it has done so as shown on that previous chart done so because of the changes

in the world price of oil, so i guess i bring these charts out and distribute them here in order to make the point that there's an underlying argument on this gas price issue that the high price of gas at the pump is a result of some failure to allow production to occur in this country. the truth is, production in the u.s. is up, is up substantially, production on federal lands is up, but in spite of that, the price of oil on the world market is also up, and it's up because of iran and it's up because of all kinds of factors that, increased demand from china and all kinds of factors that are causing the world price of oil to prize, and unfortunately, it is impacting consumers in this

country. i wish it weren't. i wish we had some way of, in the near term of dissociating ourselves from the world price of oil, but we don't, and that's what's hurting us. at any rate mr. secretary i give you those charts for what they're worth and ask for any comments that you have in the last few moments of my time. >> thank you very much, chairman bingham. i would say two things with respect to the presentation that you just made. first, oil and gas production in the united states is higher than it's been in a very, very long time, and as your chart indicates, it's moving in the right direction, and i think there probably is no figure in my mind that says it better than the fact that we're importing less oil today than we have for a very, very long time, so we are producing more here in the united states. and i think the second point you

make is one that economists have recognized for a long time, that we don't control the price of gasoline here in the united states based on the amount of production that happens here in this country. it's a global marketplace that sets the price of oil, and it is the global factors that we see both in terms of iran as well as the growing demand that we see from countries such as india and china, which are part of what we're seeing in terms of the global economics which we face today. >> thank you very much. senator mckowsky. mu could yousky. >> the answer is not just drilling coming from an oil producing state. the answer is not just drilling, but it is, it is part of the

solution so i think it is something that we would agree we are subject to the vagueries of the market, we are subject to the volume tilts on the global scene. i think the fundamental problem we have here is we're too dependent on our oil imports from the opec countries and too vulnerability to the price instability in the global market. so i'm not sure how we can argue that producing more oil at home and lessening our dependence on opec makes sense. it makes sense to have as much a cushion as we can, because i think we recognize that the cushion that is available within the world markets is one that we're not entirely sure. senator schumer has asked that saudi arabia crank it up a bit so we can get more from saudi arabia. how much spare capacity they

have? i think this is one of those things that causes the volatility that we see. i want to move off that subject for a moment, and bring up the issue that i raised in my opening comments that relates to the legacy wells drilled from 1944 to 1981, when the government drilled more than 100 wells, they have only plugged and properly abandoned about 10 out of 137 wells. within i was in the legislature, giving my address, a representative from the house asked me, well, senator, what can we do? what is our action plan on this? i said we need raise a little hell. we need to point out that there cannot be a double standard here. a resolution passed by the state how many times and i'd ask it be included as part of the record. >> we'll dlau of courinclude th.

>> it points out the federal government has received over $9 the petroleum reserve, where these exploratory wells were drilled. the state can impose fin't impo the federal government and if it could the fines would exceed over $40 billion, so again, what i'd like to do, mr. secretary, is work within the department to figure out how we can do a better job of this. right now, doi has suggested to the state of alaska that we can do one well a year. if that's the rate that we're going, we're sitting here with over 100 years to remediate and repair. i need to have an action plan for the people of the state of alaska on this, and i need you

all to be working with me a little more aggressively. in that same vain, i will also bring up the alaska land conveyance act and again asking you to assign to me, secretary hayes has been tasked with the double duty of taking on so many of alaska's issues. we appreciate that, but we need to hava to how we're going to complete these conveyances, again, if we keep on the track that we have been on, it's going to be additional 70, 80o get our land conveyed. those lands that were promised on statehood, the lands that were promised to alaskan natives under the alaska nativelct. that's too long for the federal government to keep its promise, and i need to be able to go back

and report that, in fact, we are making progress and better than just a couple conveyances a year or a couple legacy wells a year so i would ask for your commitment to be working with me, with your folks and the people in alaska. >> senatorowski, we know the priorities for both of these issues, and we agree with you that both of them need to get done, and as i said at the outset of the budget, it's a painful budget because i wish that we could do more, including the legacy wells and on the conveyance issues for alaska. the priority i placed on the legacy wells i think you can see evident in terms of the investments we made from the american reinvestment recovery act, the stimulus which helped us moved forward with plugging abandonment of the wells. >> we got three. >> well we did then in the recovery act and proposed an

additional three in the 2013 budget but i recognize there's more to go, close to 40 more we have to get done and hope question find a way of getting it done and the same thing is true with alaska conveyance. if we can put more in to alaska conveyance and get it done faster we'd be happy to do that. we'd be happy to work with you, tell you what the plans are, given the fiscal constraints we face and if there are other ways to get to the same end, which we both agree on, we both agree we need to get both of these things done. we'd be happy to work with you on that. >> well we need an action plan that works and so far it's -- and it's not just this administration. i had to push the previous administration on this as well. i don't think that any other state to get the lands promised at their statehood. thank you, mr. chairman. >> thank you. senator lee. >> thank you, mr. make sure i understood what you said

a moment ago in response to a question. you're not suggesting there is no relationship, to use the verbiage of the chart that there is no relationship between u.s. oil production and u.s. gasoline prices. would you agree with that statement, that there is no relationship between u.s. oil production and u.s. gasoline prices. >> what i said, senator lee, is that gas prices are set as a matter of the global marketplace in terms of oil. >> as a result of the complex interaction between supply and demand and all of the factors domestically and internationally that affect supply and demand. >> yes. >> okay. and u.s. oil production is one of those factors. >> yes. >> okay. mr. secretary, your office recently issued a programmatic environmental impact statement dealing with oil shale production basically, use of federal lands for oil shale production. this peis proposes to replace a

previous peis issued by your department in 2008 i believe. the 2008 peis identified about 2 million acres of federal public land that could be potentially suitable for leasing for the development of oil shale and tar sands. your new peis proposes to limit that amount by more than 75%, d 450,000 acres. meanwhile, in 2007, the bureau of land management issued several r&d leases for purposes of oil shale development. one of those r&d leases was in utah. can you assure me that your recent peis won't affect those previous leases that were issued in 2007? in other words, would those be

taken off the map now as a result of this reduction? >> with respect to your specific question, let me get back to you with respect to the specific lease. with respect to your more general question on the oil shale potential in your state of utah and wyoming and my state of colorado, the fact is that there's still a lot of research and development that needs to take place. senator domenici, when he was chairman of the committee, we went to visit a couple of those places. there are unanswered questions in terms of water supply and technology. the companies themselves admit they need to have answers to those questions so my approach to oil shale and what is set forth in the pei is a conclusion that i have reached that w in a wholesale giveaway of the public domain until we have some of the questions answered, but at the same time, moving forward in full support of the research and development programs that are

under way in my state as well as your state. >> you're aware, of course, mr. secretary, that this technology or variations of it, has been in place in use in europe for about 100 years and used to produce oil in some circumstances and produce oil and electricity and is still in use to some extent in europe, i believe they produce about a million barrels a year, from oil shale in europe currently, and they do all of this meeting european environmental standards, so it has not been used ex-tenlsively in this country on a commercial scale but it has been in europe. so is that really what we need? is it what, another 100 years of research? what is the magic bullet? >> senator lee, we're waiting for the technology to be developed, to honestly assess the potential here. the fact is, i think you were

born by then, but you might remember the 1980s and what happened in colorado and other places with the oil shale bust that was after the investment of billions and billions of dollars, because the technology wasn't there, and as to the research and development taking place now with respect to the development of carriage in from the rocks which is very different from shale gas and very different from shale oil, is something very important and we're supportive of moving forward with those research and development efforts to get the right answer. >> and there was a bust in the 1980s and of course we both know there were a lot of reasons for that and a lot of those reasons have to do with kinks in the technology have since been worked out, kinks in the technology worked out in terms of the amount of processed water, the amount of input energy that's required, the carbon footprint, the physical footprint that's required for these systems. a lot of that has been worked out, i do think it's important to remember, i don't think it's

your job to mitigate and protect all risk from the oil companies. in other words, if they want to make that investment, they are placing their own investment at risk, but should they not be given the opportunity to make the investment and to lease these federal public lands for that purpose, knowing that they could develop oil there and an estimated 1.2 trillionlock up in a small segment of utah, colorado and wyoming, 1.2 trillion barrels, more than the combined petroleum reserves of the top ten oil producing wor s countries of the world combined. >> it's my job to protect the public lands of the united states as america's natural resources and i look at the oil potential shale of your states, would uhm wim and colorado there is special there but we need to

move forward to answers to tough questions including one of the question questions, if it takes upwards of one million acre feet of water to develop water shale on the western slope of colorado, what is it going to do to agriculture and municipalities and those questions have not yet been answered. that's why the research and the development efforts that are under way, which we are fully supportive of, are important. >> my time expired but let me close this is one of the reasons why i hope you allow these research and development leases to move forward. this is one which you really can get some of the answers you're looking for, allow of those leases to move forward don't cancel, let them do their thing because they'll prove their ability to make this, to make it happen in an environmentally responsible and a commercially feasible way. thank you. >> senator manchin. >> thank you, two points i want

to talk about, the aml, the manned and mined land fund from osm, office of surface mining, i see where you all have made some recommendations there and changing the process of the grant funds, which i applaud. i think it's the right direction, picking the most hazardous sitsz es or the worst environments or states affected. the money had been distributed differently before by tonnage, how much mining was done, how much per ton, then it was coming back in that same, where it was kind of not really addressing the environmental needs. i think you're taking that step in the right direction from what i can see here. and you estimated to be great savings on that. i would like to hear the savings i guess would come and might be, mr. secretary, that if you want mr. hayes if he's worked on that end or whatever would you think about that, how the savings are calculated. >> let me just say i appreciate the comment, senator manchin.

we're trying to focus on the high risk areas, and it's especially -- >> our state has a lot of old mining, kentucky has a lot of old mining, pennsylvania has a lot of old mining that really helped build the country, and i think it's a step in the right direction to clean that up and put it back into production, if we can do something with the land. >> and i think that was part of the intention of going after the old mines and getting them cleaned up. i'll have david or pam, i don't know whether you know enough about the process and how it's changed. >> if not, you can get back to me on that. >> i think the savings, senator, is a gain from focusing on the intent of smack row, the coal mine issues themselves, as opposed to other needs. we'll -- >> i interpreted it by looking at, now targeting the return on the aml money, at ban donned mine land money, it's going to

where the need is. >> right. >> where we've always said. >> that's the primary intent. >> the savings are basically we were able to clean up and put land in and put land in production. i assume that's the effect you all have. everyone agree to that? >> that's correct. >> that's correct. >> now where i disagree -- you were afraid of that, right? >> not afraid of it. >> concerning the osm and bureau of land mines, the merger, i can't find anybody that seems to be in favor, that thinks this would be a good thing. i don't see the generation of savings, the disruption of how the operation -- osm has been kind of a long-term relationship learning how to work as a partnership, working, making sure there's a balance between the environment and the economy, going into the blm or recommending that merger, i know you're doing it from cost effectiveness, and i can understand that. sir, on this one i don't see the savings of what could be the

downturn of having more regulations to the point we can't do anything. we're having a hard time now. maybe somebody may want to talk to the -- are you serious about the osmb/lsm mergers? >> senator, let me first say i think it's important for us in government to always take a look at our agencies and see how we can do a better job. it's in that vein that we move forward with my effort which i authorized, approved and supported then and still support today to take a look at how we can do a better job between blm and osm. based on the review we've gotten and a report currently on my desk, i think there will be efficiencies we can find between blm and osm. i have not yet read the final report. the deputy secretary has been leading it. my sense is that the guidance from this committee and you staff, especially sam fouler who knows a lot about this, knows there's not going to be the

wholesale consolidation once planned. but there will be changes and more efficient ways -- >> i understand that. that's not the problem. the bottom line is i think we were expecting a report by february 15th. do you happen to have your report? >> i actually received it last night. it's in my briefcase. >> you'll share it with us? >> yes. >> it will not go the direction we thought it might have been going before? >> i think we should have a separate conversation before we release it. i think it will improve both the functions of osm and blm, and i think he will find efficiencies there. i think -- i hope you will be positive in your response. >> the stream buffer, sir, and i know it's been talked about briefly and brought up by senator brass sew -- i know my time is i'm concerned about the definition. i want people to know in west virginia our streams are very valuable, our water sources are very valuable. our topography, it is what it is. a stream that carries water 12

months a year, a stream that provides recreation, provides life giving water and sources of that have not been touched nor ever intended to be touched. i think there's a misnomer. we're talking about what some people identified as a stream which is basically a drainage ditch. if you have a piece of property and you change the ditch from here to here so when they have heavy rains and it runs off it goes in an area still keeps your property more useful. that's a discussion i'd love to have with whoever in your office we could have that with. i know my time is up. if you would accommodate me with that, i would appreciate it. >> senator manchin, we know the importance of the stream buffer protection rule to you and your state. as we move forward in addressing how we can both supp coal development at the same time making sure we're protecting streams, we will make sure we're protecting you. >> we believe strongly in west virginia there's a balance

between the environment and the economy. we're more than glad to lead the way f you will. we want a partnership. thank you. >> senator heller. >> i'll talk about another issue important for nevada, something you already touched on, mr. secretary, a little bit oovps. that is the listing of the sage grouse. i have a letter here that responded to a request for information. first of all, i want to tell you thank you. i'm not used to the administration responding to requests for information. so to have this here means a lot. in fact, a shared concern that we have for that listing was an important part of that. if the sage grouse were to be listed, i think it would have a devastating impact on the economic activities on public lands including one of our shared priorities, and that's renewable energy. i have many concerns with the land management controls proposed by blm and the sage grouse. for that reason i'm putting

together a sage grouse working group. you have an interim plan without the listing, an interim plan for -- it was i believe called an instructional memorandum. that was to maintain and enhance sage grouse habitat which i think is appropriate, an appropriate goal. the concern i have is that mitigation is not part of the restrictions. so this is my question. i'm concerned if the proposed actions themselves would not be more restricted, perhaps more harmful than an actual listing. can you respond to that? >> senator heller, it's -- you're focused on a very important issue for all the western states including the nevada, at least 11 western states where we know there is sage grouse habitat. director abbey is moving forward with new resource management plans to deal with sage grouse i

think in 62 areas, but important to that effort we or working very closely with the states including your governor, governor sandoval, governor hickel from colorado, governor meade, governor otter in trying to move forward in a program, hopefully able to develop a western states conservation program that will protect the species and at the same time allow development to go forward. based on successes we've had with other species in other parts of the country, i'm very hopeful. i do believe we can get it done. >> here is the concern, with this new memorandum that, as i just mentioned, was milt gags. if you have an application for a new mining site, without mitigation do you think you could maintain or enhance sage grouse habitat? if you had an application for a solar farm, do you think you

could put up a solar farm without mitigation and would maintain and enhance the sage grouse habitat? can you do the same thing with agriculture if you have some kind of application to push agriculture, can you do that without mitigation? that's the concern i'm harg from my constituents back home. they have no problems with moving forward and your goal, a healthy goal of maintaining the sage grouse. but question is can you meet those goals without some possibility or ability to mitigate mining issues, agricultural issues and renewable energy issues? >> senator heller, i think with respect to all of our permitting programs including many in your state both on mining and he knuble energy and transmission and so many other things, mitigation is part of the package. we have done a good job on that from my point of view in terms of requiring mitigation when you

have impacts in the development of renewable energy and other projects. it would be better, frankly, if we didn't have a complete cohesive plan for sage grouse strategy across 11 states than trying to do it project by project and hopefully the effort we have under way with the leadership of director abbey and director ash and the involvement of the governors of the states, we'll get us to that point. >> thank you. you answered my question. through. >> senator murkowski, did you have additional questions? >> mr. chairman, i do have a whole bunch of additional questions, but in the interest of time in recognizeding the secretary has given us a great deal of time this morning, i will submit them in wriing. i will ask, though -- it's my understanding that last year after a similar budget hearing it took almost six months to get some responses to our questions. by that time, of course, they're stale. i understand you have an awful lot on your plate, but if i could ask that we have more

prompt replies. i'll have the pleasure of having you before the appropriations committee tomorrow, so we'll be able to spare you some of the written responses in those questions tomorrow. if we could have a little more expediency with the responses, i would appreciate it. thank you for being here today. >> we will do our best. >> mr. secretary, you've been generous with your time. we appreciate it. we look forward to continuing to work with you to solve these problems. thank you for coming. >> thank you very much. >> that will end our hearing.